Daniel Hegarty (pictured) is founder and chief executive of habito.
The word ‘mortgage’ derives from a French Law term meaning “death contract”. Spooky eh!
But mortgages don’t need to be scary, and habito’s three mortgage tricks below aim to result in a treat for anyone going through the mortgage process!
1. Trick! First-time buyers should know there are options beyond their personal bank. They should seek real-time mortgage advice from online services where the application is free, available 24/7 from your mobile, and most importantly whole of market.
Treat! By looking further afield they won’t be limited to a traditional brokers’ list of preferred lenders, but on the best possible deal for their particular needs.
2. Trick! They should use a mortgage calculator before starting their home search to get an idea of how much they can borrow (or save each month, if you already have a mortgage). No charges, no credit checks, but do keep in mind they are just an indication of what the borrower could afford.
Treat! When borrowers find a home they’re interested in, they should get a free Agreement In Principle (AIP) from a lender in 24 hours through an online mortgage broker. It’ll save them months of time, long queues at the bank and paying a premium on broker fees.
3. Trick! If they’re still on their lenders standard variable rate (millions of Brits are on the wrong mortgage, so it’s worth checking), they should absolutely consider switching. It’s much easier than they’d think and they could save £4,000 a year on average!
Treat! A fixed rate mortgage is a hedge against future uncertainty. That doesn’t mean they are optimising repayments to their absolute lowest, but the borrower is protected from downside risk should interest rates rise.